This paper analyses the impact of aid, and its optimal allocation, when conditionality is ineffective. It is assumed that the recipient government will implement its own preferences no matter what. In this set up, aid can still affect the behavior of a recipient, not through conditionality but...

The standard theory of optimal income taxation under uncertainty has been developed under the assumption that individuals maximize expected utility. However, prospect theory has now been established as an alternative model of individual behaviour, with empirical support. This paper explores the...

How does concern for consumption relative to others (”relativity”) affect the progressivity of the optimal income tax structure? In this paper we revisit this literature and present a more detailed analysis of the solution to the non-linear income tax problem with consumption interdependence...

In his Presidential Address to the European Economic Association, Tony Atkinson introduced the idea of a “Charitable Conservatism” position in public policy, which “exhibits a degree of concern for the poor, but this is the limit of the redistributional concern and there is indifference...

What explains the spectacular increases in inequality of disposable income in transitional economies of Central and Eastern Europe? There are at least two possible explanations. First, the pre-tax distribution of income became more unequal because of the shift to a market economy. Second, the...

The existing literature on optimal taxation typically assumes there exists a capacity to implement complex tax schemes, which is not necessarily the case for many developing countries. We examine the determinants of optimal redistributive policies in the context of a developing country that can...

This paper is concerned with the optimal use of income information in the design of tax/transfer systems to alleviate poverty. The issue is one of optimal non-linear income taxation, but using a non-welfarist objective function that seems to accord well with the common concerns of policy debate:...